Look beyond equity MFs; pick up gold
When Ajit Dayal, director, Quantum Mutual, and one of the first analysts to enter the Indian stock market, says that investing in mutual funds (MFs) is one of the worst ways to punt the market.
By Gaurav Pai, TNN |
MUMBAI: When Ajit Dayal, director, Quantum Mutual, and one of the first analysts to enter the Indian stock market, says that investing in mutual funds (MFs) is one of the worst ways to punt the market. He has a point. With the market at its volatile best, it makes sense to stay invested in funds. But what else can you do to balance your risks?
Diversifying into other asset classes may be one of the best ways. Agrees Paras Adenwala, chief investment officer, ING Mutual. “Investors should invest in equity MFs only with a long-term view. But at the same time they should also look at other asset classes. There is a wide range of products available in the market that allows you to invest in gold and overseas companies.
Putting your eggs in different baskets helps,” said Mr Adenwala.
A part of your investment can be in gold. One can buy gold units through various exchange traded funds, like those offered by Kotak, UTI or Benchmark AMCs. Gold ETFs allow retail investors an opportunity to invest in gold at wholesale prices. A much better investment option than buying physical gold, considering the hassle of purchasing and storing the metal. The other avenue available now is to invest in overseas equity funds. Fund managers say that investors should also look at allocating a small part of their portfolio in such funds in a bid to diversify their portfolios. Emerging economies (China, Russia, Taiwan, Mexico and Brazil) are expected to deliver comparable or sometimes even better returns than India in the coming years. Around 5-10% of your portfolio in such a scheme would hold you in good stead.
These days, investors also have the option of investing in capital protection funds. These funds allow investors to keep his initial capital safe, irrespective of the ups and downs in the market.
Diversifying into other asset classes may be one of the best ways. Agrees Paras Adenwala, chief investment officer, ING Mutual. “Investors should invest in equity MFs only with a long-term view. But at the same time they should also look at other asset classes. There is a wide range of products available in the market that allows you to invest in gold and overseas companies.
Putting your eggs in different baskets helps,” said Mr Adenwala.
A part of your investment can be in gold. One can buy gold units through various exchange traded funds, like those offered by Kotak, UTI or Benchmark AMCs. Gold ETFs allow retail investors an opportunity to invest in gold at wholesale prices. A much better investment option than buying physical gold, considering the hassle of purchasing and storing the metal. The other avenue available now is to invest in overseas equity funds. Fund managers say that investors should also look at allocating a small part of their portfolio in such funds in a bid to diversify their portfolios. Emerging economies (China, Russia, Taiwan, Mexico and Brazil) are expected to deliver comparable or sometimes even better returns than India in the coming years. Around 5-10% of your portfolio in such a scheme would hold you in good stead.
These days, investors also have the option of investing in capital protection funds. These funds allow investors to keep his initial capital safe, irrespective of the ups and downs in the market.
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